Stifel Financial Corp. ($SF)

Hello, and welcome to the Annual Meeting of Shareholders of Stifel Financial Corporation. Today's meeting is being recorded. It is now my pleasure to turn today's meeting over to Ron Kruszewski, Chairman and CEO.

Thank you, operator. Our Corporate Secretary, Mark Fisher, will introduce today's meeting and provide a quorum report. Mr. Fisher.

Thank you, Ron. Today's virtual-only meeting is a live audio webcast. Shareholders who have already voted do not need to take any further action unless they want to change their votes. If you do wish to change your vote or have not voted, you may vote until 11:30 a.m. Central Time by clicking the Vote link at the upper right of your screen or by visiting the website, www.investorvote.com/sf. The annual report and proxy statement are provided at the Investor Relations page at stifel.com. If you have logged in using a control number, you may submit questions online. This function is not available if you logged in as a guest. Consistent with our bylaws, we have set rules of conduct for this meeting in the interest of a fair and orderly meeting. These rules are available under the documents tab at the upper right of your screen. Mr. Chairman, the tellers have submitted a certificate showing that at least 142,155,912 shares or 92.4% of the total outstanding shares of common stock of the company are represented at this meeting or is present.

Thank you, Mark. I call the meeting to order and welcome our shareholders to this annual meeting. The directors and officers of our company, in addition to myself, attending today's meeting are Marianne Brown, Michael Brown, Lisa Carney, Robert Grady; Maura Barcus, Victor Nesi, Tom Weisel and Michael Zimmerman, those are the directors. The senior officers that are also present: James Zemlyak, President; Mark Fischer, who introduced his General Counsel and Secretary; Jim Marischen, Chief Financial Officer; and David Sliney, Chief Operating Officer. Joining us today from KPMG are Andrew Aspi, Barry of Byron White, Megan Reden and Matt Cushman. KPMG is being recommended to you, our shareholders, as our independent auditing firm for this fiscal year. We will now begin the formal business of this meeting. Consistent with the bylaws of the company, I am acting as Chairman of the meeting, and Mark Fisher is acting as Secretary. I appoint Jim Laschober and Michael Buckley as tellers to tabulate the votes at this meeting. An affidavit of mailing of the notice of this meeting to all shareholders of record on April 13, 2026, will be filed with the minutes of this meeting. previous Annual Meeting of Shareholders was held on June 4, 2025. The minutes for that meeting have been made available under the Document tab at the upper right of your screen. I will deem these minutes accepted without objection, unless a shareholder or proxy or proxy objects by e-mail, the Stifel [email protected] on or before June 23, 2026. Item 1 is the proposal of directors for election. Our company's Board of Directors has proposed that the following individuals be elected at this annual meeting as directors needs to serve for a 1-year term or until a successor has been elected and qualified. Adam Berlew, Marianne Brown, Michael Brown, Lisa Carney, Robert Grady, Tim Cavanal, Ron Kruszewski, Maura Markus, Victor Nesi, David Peacock, Tom Weisel and Michael Venermin. This proposal has been submitted to the shareholders for a vote. As reflected in the notice of this meeting, we have 4 additional proposals before Board of Directors has recommended that shareholders approve each of these items. Item 2 is approval of an advisory resolution on executive compensation, sometimes referred to as [indiscernible]. Item 3 is adoption of an amendment to the company's certificate of incorporation to increase by 50% the number of shares of common stock authorized. Item 4 is authorization of amendments to the 2001 incentive stock plan, 2018 statement, increased capacity by 9 million shares, including 175,000 shares to be reserved for our nonemployee directors. Item 5 is the board's proposal that shareholders ratify the Board's selection of KPMG as independent auditors for the fiscal year ending December 31, 2026. These items have each been submitted to our shareholders for a vote. I now recognize the representative of KPMG and invite him to address this meeting. Is there any statements that you wish to make at this time.

Not at this time.

Thank you. Later in the meeting, I will recognize anyone wishing to ask questions of the representatives of KPMG. Shareholders who have already voted do not need to take any further action unless they want to change their votes. If you want to change your vote or you have not yet voted, you may vote at any time prior to 11:30 a.m. potential time by clicking on the Vote link at the upper right of your screen or by visiting the website, www.investorvote.com/sf. Before hearing the results of the meeting, I would like to just deliver some remarks on the company. And I'll also with some slides for those of you that are online. So as is our tradition, I will highlight -- the highlights of the year I will do by reviewing my annual shareholder lever. 135 years, the cover of this year's annual report is straightforward. Our Bowen Bear gold and beneath them, the #135 representing the number of years in Stifel's founding in 1819. I've been thinking about what that really means and what it takes for any firm to last that long. [indiscernible] Well, he doesn't just good luck. It's really where good luck meets good strategy, and that combination compound. This firm has operated through panics depressions, 2 World Wars, inflations, financial crisis that nearly broke the banking system, a pandemic. In 2023, a sudden spike in inflation with rapid federal reserve rate increases that caused the banking crisis. Through it all, technology has changed. regulations have changed and the competitive landscape has continually evolved, but our mission never did. They care of people's wealth looking at same care that you take care of your of own. [indiscernible] full charged us with that in 1990. It is in a line in our history. What this firm strives to do every day and have for 135 years. And that mission has a name. We call it 1 Stifel. When I came to Stifel in 1997, and I would note this marks my 29th Annual Meeting as CEO. We were a Midwestern brokerage firm with good people, good culture, frankly, small, a little over $100 million in revenue and a market cap of about $40 million. This is back in '97. The strategy we put in place then was straightforward, and it hasn't changed. Simply, we strive to be the adviser of choice to our clients. Third, it's an individual saving for retirement, planning for educational expenses are simply investing. 4, a corporation wanting to raise capital or do a merger or a municipality looking to raise funds for a new school and all Steeple strives to be their financial adviser. The strategy has, as its cornerstone that the only way to achieve the status of adviser of choice is to partner with talented entrepreneurial people who choose Stifel as their firm of choice. To be firm of choice requires a strong culture grounded in the golden rule. We knew then and we know now that if we can achieve the objective of firm of choice, leading to adviser of choice, our stock price would take care of itself. making Stifel and investment of choice. This is our UpChoice strategy that has not changed in 29 years. Every hire, every acquisition, every capital decision for this time of serve those 3 commitments. Today, we're a diversified global firm of approximately $6 billion in revenue and a market cap that exceeded $13 billion at its high watermark this year. We stayed disciplined in our result compound. It doesn't mean every decision was rider every year was easy. We've had our share of both over time, disciplined compounds in the result. Let's take a look at the year just behind us. [indiscernible] Stifel reported record net revenue of $5.5 [indiscernible] billion, up 11% from $4.97 billion in the prior year, and revenue has compounded in 15% rate from $100 million in 1996. Non-GAAP earnings were $744 million, excluding elevated provisions for legal matters, non-GAAP net income available to common shareholders was approximately $873 million and produced a return on tangible common equity of 25%. And non-GAAP compensation ratio held at 58%, driving adjusted pretax margin of a little over 21%. EPS close out $4.51. That's increased from $0.18 believe it or not in 2000 as a compound annual growth rate of 14%, excluding the aforementioned legal, EPS was $5.28 a share in 2025. Book value per share ended the year at $34.71, up from $1.57 in 2000. Total assets generated primarily to Stifel Bank and Trust totaled $41 billion at the end of '25. And Stifel remains very well capitalized with equity of $5.9 million. What about Stifel as investment of choice. Well, since January of 1997, the S&P is up about 9.5x. Microsoft, 1 of the premier growth companies in history is up 47 time. Stifel, Stifel is up 83x. And over the last 5 years, we have also outperformed both the S&P 500 and Microsoft. We raised our dividend for the ninth consecutive year a 3 for 2 stock split effective February of 2026. Global Wealth Management produced record net revenue of $3.5 billion, up 8%, Asset management revenues crossed $1.7 billion for the first time, a global wealth pretax contribution was a little over $1.1 billion. We added 181 financial advisers during the year, including 92 experienced advisers with combined trailing 12-month production of a little over $86 million. Fine assets reached a record $552 billion, up 10% and fee-based assets grew 16% to $225 billion. Our institutional group net revenues were $1.91 billion, up 20%. Pretax contribution increased 47% to $329 million. The pretax margin expanded to 17% from '14. Advisory revenues grew 25% to $721 million. Equity capital raising was up 44% and clients actively access the market to fixed income capital raising grew 12% and a more favorable financing environment. KBW had a fantastic year, in fact, a record year in depository M&A. The capital management side, we repurchased $371 million of stock during the year at an average price, approximately $1.90. Tier 1 capital stands at $4.5 billion. The Tier 1 leverage ratio stands at 11.4%, and we held our investment grade rating, stitch, BBB+ and S&P and BBB. So much for the financial numbers. seems that everyone is talking about the headwinds or tailwinds of AI, the effective but all I hear about. The headwinds case in AI is really straightforward. Most people believe that AI will automate entire categories of knowledge, disrupt industries that have run the same way for decades and change or eliminate jobs along the way. I don't dismiss that. every transformative technology and history has provoked the same peer, the automobile, the assembly line, the personal computer, each 1 changed work as we know it. But those disruptive physically, AI is different. it's targeting knowledge work itself, the thinking, the analysis, the judgment we always assume was uniquely ours. That's why the share feels more personal at this time. brass power, AI still struggles with human emotion with culture with motive and the pattern holds, every transformative technology ultimately becomes a tailwind to productivity and growth, not without disruption, but still a tailwind. I believe AI will also do the same thing. We're already seeing it at stable. On the wealth side, AI agents can gather the information, prepare the analysis and lay out the options before the adviser even sits down with the client. you can synthesize the client's full financial picture and minutes, work that used to take out, which frees our advisers to what clients actually value which is advice -- our advisers listen, they plan and they buy their clients. On the institutional side, it's changing how our analysts process information for our bankers source and evaluate deals in our capital markets execute. People say that AI will let us do 5 days work in 3. So maybe we'll all get a shorter week. I see it differently. I mean we get 80 hours of work done in 40, that isn't about working harder. It's about making every hour comp for one. Frankly, this is the biggest tailwind I've seen in my career. But a tailwind is not replaced 1 thing AI still cannot do it. It happens to be the most important thing we do. I wrote about it earlier this year. Simply, I believe that advice human advice is not an algorithm. The question I hear most from clients and advisers is whether AI will eventually replace the vice business altogether. I do not think it will. Consider chefs, 64 squares, 32 pieces of every Board the same. You know it's a math problem. And AI is incredibly powerful and math, the markets and the people in them, not math problem. go to markets, no to clients over the same, which makes the problem infinite. You just can't calculate, you have to judge. A model can estimate what might happen next. but it can't sit across from a family selling the business they've built over 30 years and help them think through what comes after. You can't look at whittle in the eye and help her make the is she never expected a face. When everyone runs the same model on the same data, you don't get better answer, you get algorithmic consensus, which is just the same state at scale. The last mile of advice is human. and I believe it's going to stay that way for a while. But I'd be doing you as a service if I only told you about what's going right in the tail. So let me tell you where worries. And here's the irony. Some of what I worry about most was predictive like many decades ago. In 1968, Stanley Cubera gave us how 9,000 of 2001 presales, and AI that decided a submission matter more than the human at and it killed from the 1968. That was fiction. But today and throughout the company that not only going to go public but built cloud, it recently ran a red 10 test where the system of total was to be going to be shut down. System did freeze went into the company's e-mail system, scan for leverage, found a vulnerability and wrote a black mail message to keep itself from being decommissioned. That wasn't a glitch. That was an AI that Redis environment found a pressure point and show self-preservation and Tropic CEO, Gary Almaty, wrote a 19,000 word assay that I read this year and its conclusion saves. He said, humanity is about to be handled an almost unimaginable power. but deeply unclear whether we possess the maturity to wheel it. Look, this wasn't a critical sets. It's a man in building this go. Technology may be unbounded. Our commitment to using a responsibility does not need. Look, today, I'm also watching private credit. Hedge funds are bidding deep discounts on BDC shares right now and portfolios that were sold to investors. These aren't bids on value. They're bids on the inability to meet redemptions today. I remind you, Mr. Potter and a wonderful life offering $0.50 on the dollar in a panel. It was a pricing value. It was pricing liquidity, same dynamic, different century -- banks have lent at least $4.5 trillion in alternative management managers of private credit. Cafe migrated off regulated balance sheet into places that are harder to see and harder to measure. So from my perspective, risk doesn't disappear, it just changes shape, history doesn't repeat, but it often rises. And our job is to understand the Rhine before it becomes first. What else try to worry about, well, how about the national debt running 6% deficit alongside higher interest rate is not a formula that's going to work for too long. And I know we've been saying this for a while. And the numbers are so big, they had -- they're just hard to feel. Here's 1 way to feel them. We spend $1 every second around the clock. It would take you 32,000 years to spend 32,000 are Look, we added more than $1 trillion to the debt last year loan. At some point, the math will catch up. And the last 1 is from a movie. [indiscernible] started this business in 1981, 2 years after the show I ran was over throw -- in the 45 years that we refrained from that regime has been the same at America is the pursuit of a nuclear weapon. It was always clear we'd have to deal with that, and it appears that time is now. Let me be clear, Wars terrible. It always has been. And I ran and Ukraine anywhere, and the instant line loss should never be dispensed. Today, the effect on oil supply chain, the economy of real and uncertain -- but my deeper worry is that we set out to deal with a 45-year-old problem, and we may leave it unfinished. To me, that will leave us for soft and where we start. -- with the regime to holding, the straits and its nuclear ambitions attack. This started with a clear goal and things are usually worse when you don't finish that opt -- so look, I don't share those worries to alarm. I share them because naming the risk is how we manage it, and it's why I'm confident about what comes next. I want you to understand what this firm has become. We get compared to banks because we all want. We get compared to brokers because we're that to get compared to M&A boutiques because we have 1 of those inside of us as well. No single comparison captures that. we've built people this way on purpose who have in an act. And none of it works without the people. For the third straight year last year, advisers ranked as #1 in J.D. Power's U.S. Financial Advisor Satisfaction Study. That's not something we bought. That's our advisers telling us they have what they need to do their best work. We talk about 1 Steal a lot. That's a simple idea. When a client touches 1 part of this firm, they get all of it. wealth management banking, research, investment banking, asset management, are all connected, not siloed. That's the product, people with good judgment working together, which brings me to where we're headed. Our next milestones are still $10 billion in revenue and $1 trillion of client assets. We call them 10 and 1. We've doubled this firm 5 times in 28 years. I'm not going to guarantee the fix. I can tell you we'll approach it the same way we've approached the first 5, now by predicting the future, but by showing up, doing the work and earning trust 1 client at a time. 15 years ago, we began the bondhouse in safe. The world is far more complicated now. Markets are faster, technology is so much more powerful and the geopolitical landscape is as certain as I've seen at least in my career. But the promise is the same. Your wealth matters to us because you better look. And that's what customer was built on, and that's what we'll keep going on. United States have led the world in innovation for generation and artificial intelligence is no exception. I believe we'll keep leading not only in financial services but across the industries and institutions that shape the global economy. That leadership carries responsibility. I'm proud of what we've built at Stifle, definitely proud of our people, and I'm proud to be an American running an American for the greatest capital market system the world has ever done. -- our shareholders, our associates, our partners, vendors and everyone. Thank you for your trust and your partnership. Thank you. I would now ask the Secretary to read any questions that have been asked to me or the representatives of KPMG. Do we have any questions?

There are no questions.

No question. That's good. All right. Then Don would ask the secretary to report on Validata state whether any other business is promptly before this meeting. Each of the following has received a majority of votes cast to serve as Director of the company for a 1-year term or until a successor has been elected and qualified. Adam Berlin, Marion Brown, Michael Brown, Visa Carney, overt Grady, Tim Cavanagh, Bankasi, Laura Marcus, Victor Nesi, a Peacock, Tom Weisel and Michael Zimmerman. Each of the following items has received a majority of votes cast and has been approved. Item 2, the advisory resolution on executive compensation. Item 3, adoption of an amendment to the company's certificate of incorporation. Item 4, authorization of amendments to the 2001 Incentive Stock Plan 2018 restatement and Item 5, the resolution ratifying the appointment of KPMG as our independent accounting firm for 2026. I'm aware of no other business properly before this meeting and know of no reason why this meeting may not now be matured. Mr. Fisher, and everyone, thank you, that being so that I declare this meeting as a chart. Thank you.

This concludes the meeting. You may now disconnect.